Hastings Ltd. is seeking to expand its share of the widgets market and has negotiated to take over the operations of F-Squared Ltd. on January 1, 2013. The statements of financial position of the two companies as at December 31, 2012, were as follows:

Hastings is to acquire all the assets, except cash, of F-Squared. The assets of F-Squared are all recorded at fair value except: Fair value
Inventory............... $ 39,000
Freehold land............. 130,000
Buildings............... 40,000
In exchange, Hastings is to provide sufficient extra cash to allow F-Squared to repay all of its outstanding debts and its liquidation costs of $2,400, plus two fully paid shares in Hastings for every three shares held in F-Squared. The fair value of a share in Hastings is $3.20. An investigation by the liquidator of F-Squared reveals that at December 31, 2012, the following debts were outstanding but had not been recorded:
Accounts payable............... $1,600
Mortgage interest ............... 4,000
The bonds issued by F-Squared are to be redeemed at a 5% premium. Costs of issuing the shares were $1,200.
Required
(a) Prepare the acquisition analysis and journal entries to record the business combination in the records of Hastings.
(b) Prepare the statement of financial position of Hastings immediately after the acquisition.

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Cash Accounts receivable Inventory Land Buildings (net) Property, plant, and equipment (net) Goodwill Hastings $ 23,000 25,000 35,500 150,000 60,000 65,000 25,000 $383,500 56,000 50,000 100,000 100,000 F-Squared $12,000 34,700 27,600 100,000 30,000 46,000 2,000 $252,300 $43,500 40,000 50,000 Accounts payable Mortgage loan Bonds Share capital 100,000 shares 60,000 shares 77,500 $383,500 60,000 58,800 $252,300 Retained earnings 3